In its 3Q15 Fairchild made a net loss of $8.2 million on quarterly revenues of $342.1 million, that were down 10 percent from 3Q14. In its 3Q15 On Semi made a net profit of $46.3 million on revenues of $904.2 million

The acquisition will boost On Semi's annual sales to about $5 billion – and the move is just one of many in the semiconductor industry which is going through a wave of consolidation. The enlarged On Semi will operate in automotive, industrial and smartphone markets.

The deal is subject to regulatory approvals and is set to be funded by $2.4 billion of debt raised against the companies' combined balance sheet.

"The combination of On Semiconductor and Fairchild creates a power semiconductor leader with strong capabilities in a rapidly consolidating semiconductor industry. Our plan is to bring together two companies with complementary product lines to offer customers the full spectrum of high, medium and low voltage products,” said Keith Jackson, CEO of On Semi, in a statement.

On Semi said it expects to achive annual cost savings of $150 million within 18 months of the closing of the transaction. No forecast was given of when that might be.